A representative from Pioneer USA contacted WesleyTech to clarify on the recent plasma business announcements. Below is a letter from Russ Johnston of Pioneer USA, who is the Executive Vice President of Marketing and Product Planning, Home Entertainment Business Solutions Group.I am sure by now you have seen the announcement that was sent from Pioneer. I hope it addresses the misinformation and speculation that surfaced this week.

Pioneer remains passionate about delivering the ultimate home theater experience based on the brand strategy the company set nearly a year ago, to bring to market the best home theater technology, including high-definition plasma televisions like KURO.

To do this, Pioneer will continue to focus on what it does best which includes engineering game-changing plasma technology and producing proprietary components that differentiate Pioneer plasma televisions from the rest of the market. The next generation KURO flat panel televisions will be coming this summer as planned with no disruption in Pioneer production.

As you are aware, outsourcing is common practice among successful consumer electronics companies all over the world. Many of the most notable and respected brands of televisions, cell phones and video game consoles do not manufacture their own products. Pioneer plans to outsource production of plasma panel modules in 2009 in an effort to right-size the business.

Pioneer is developing plans with a production partner that offers the best quality and reliability in line with its own strategy and high standards, but at this point no partnership arrangements or decisions have been made.

This announcement will not affect Pioneer’s technology leadership in home entertainment but provides Pioneer the opportunity to further invest in bringing high-definition display innovations to life.

The Mobile Business Group within Pioneer has been a consistently profitable business and has always been run as a separate division. This announcement will have no effect on this group.

We will leverage the engineering capabilities to compensate for any cutbacks in the plasma display business by shifting related personnel and other business resources to the Car Electronics business; the professional sound & visual (Pro SV) business, which involves DJ equipment; and the audio/video product business, including Blu-ray Disc
related products.

Please see the announcement (attached).

Russ Johnston

Executive Vice President of Marketing and Product Planning, Home Entertainment Business Solutions Group Pioneer Electronics (USA) Inc.